| Wed 6 Nov 2002, 13:59 | | Liberty International plc - Placing of a minimum o |
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Liberty International plc - Placing of a minimum of 16 million new ordinary
shares at 560p per share
Not for release, publication or distribution in, or into, the United States,
Australia, Canada or Japan
6 November 2002
LIBERTY INTERNATIONAL PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: LBT
Issuer Code: LILI I
PLACING OF A MINIMUM OF 16 MILLION NEW ORDINARY SHARES AT 560p PER SHARE
The attached is a press release issued by Liberty International this morning.
Donald Gordon, Chairman of Liberty International PLC, commented:
"Despite the turbulent and volatile conditions currently prevailing in the
world`s financial and securities markets, our chosen sectors in the real estate
markets, notably our shopping centre and retail businesses, which comprise
around 90 per cent of the Group`s total assets, have continued to produce a very
sound outcome, demonstrating the exceptional resilience of our prime regional
shopping centre assets.
The strengthening of the Group`s capital base as a result of this issue, which
is partially related to the recent important announcement concerning our
increased ownership of The Victoria Centre, Nottingham, will facilitate the
significant range of attractive investment and development projects now open to
us. Collectively, these transactions represent a major extension and
consolidation of our established and premier nationwide franchise in the UK
regional shopping centre industry.
Dilution of net asset value per share from the issue of the Placing Shares will
be minimal and will, we believe, be more than compensated by the longer term
benefits and improved prospects for the Group from the promising projects on
which we are now embarked which should be positive for both growth and
shareholder value."
Contacts:
Liberty International PLC +44 20 7960 1200
Donald Gordon, Chairman +44 20 7960 1201
David Fischel, Chief Executive +44 20 7960 1207
Morgan Stanley
Jonathan Lane +44 20 7425 4303
John Hyman +44 20 7425 6115
Public Relations (UK) - Hudson Sandler
Michael Sandler +44 20 7796 4133
Public Relations (South Africa) - College Hill Associates
Matthew Gregorowski (London) +44 20 7457 2020
Nick Williams (South Africa) +27 (0) 83 607 0761
Not for release, publication or distribution in, or into, the United States,
Australia, Canada or Japan
6 November 2002
LIBERTY INTERNATIONAL PLC
PLACING OF A MINIMUM OF 16 MILLION NEW ORDINARY SHARES AT 560p PER SHARE
Background to the Placing
Liberty International PLC is a major property group listed on the London Stock
Exchange owning 100 per cent of Capital Shopping Centres PLC ("CSC"), the
leading UK regional shopping centre business, and Capital & Counties plc
("Capital & Counties"), a long established commercial and retail property
investment and development company.
Liberty International has recently embarked on a number of initiatives which the
Directors believe have the potential to create significant value for Liberty
International Shareholders.
(a) Victoria Centre, Nottingham
On 4 November 2002, Liberty International announced that it had assumed the
general partnership role of the Victoria Centre Partnership ("VCP") following
the retirement by Baffin (U.K.) Limited ("Baffin") as General Partner. The
Liberty International Group`s effective interest in the Victoria Centre prior to
this retirement amounted in aggregate to approximately 38 per cent, including
20 per cent directly and a 23 per cent interest in the UK Prime Property
Partnership of which Baffin was the General Partner. Following Baffin`s
retirement, the only partners in VCP are wholly owned subsidiaries of Liberty
International, one of which has now assumed the general partner role. The
Liberty International Group is therefore now the effective owner of 100 per cent
of the ungeared Victoria Centre through VCP.
The total retirement payment to Baffin of GBP204 million has been funded
initially by a loan from Liberty International to VCP. However, Liberty
International`s net outlay, taking account of the proceeds attributable to its
23 per cent. existing interest in the UK Prime Property Partnership, amounts to
approximately GBP157 million, which has been financed initially from the Group`s
existing long term banking facilities.
VCP owns as its sole asset the freehold of the Victoria Centre, Nottingham, a
major regional shopping centre ranked within the top 10 shopping centres in the
UK by size. The Victoria Centre was opened in 1972 as one of the first of the
new generation of shopping centres to be built in the UK and comprises 956,000
sq.ft. of retail space, anchored by John Lewis and House of Fraser. The latter
opened in 1996 as part of a major extension of the Northern end of the scheme.
The centre provided a net annual rental income of GBP15.8 million as extracted
from the latest audited VCP accounts for the year ended 31 December 2001. The
centre has 117 separate retail units, including a wide variety of multiple
retailers, and has the benefit of approximately 2700 car spaces and excellent
public transport links. Nottingham as a city is ranked 5th nationally by size
of shopping population with some 3.8 million people in the catchment area.
The above arrangements increase the Group`s involvement with the Victoria Centre
which goes back to its original construction and opening in 1972. The centre
has a proven successful track record. The arrangements are entirely consistent
with the Group`s strategy of focusing primarily on dominant regional shopping
centre locations in the United Kingdom.
(b) Committed investment and development programme
As at 30 June 2002, the Group had a committed investment and development
programme of around GBP500 million, excluding the Victoria Centre, Nottingham.
This includes the following projects and transactions:
- an GBP85 million extension of MetroCentre, Gateshead, the UK`s largest
regional shopping centre. The 371,000 sq.ft. extension, on which construction
has recently commenced, incorporates a new Debenhams department store, 28 new
shop units and an 1100 space car park, and is scheduled for completion in 2004.
- a GBP275 million commitment to Chapelfield, a major 510,000 sq.ft. regional
shopping centre development in Norwich, Norfolk scheduled to be completed and
open in 2005.
- the further development as a major destination of Braehead, Glasgow which
already has over 1 million sq.ft. of retail and leisure space. Phase 2 of the
Braehead project represents a major regeneration project on 145 acres, where
Renfrewshire Council has resolved to grant outline planning permission for a mix
of leisure, residential and office uses.
- the increase of CSC`s holding in The Potteries, Hanley, Stoke-on-Trent
(551,000 sq.ft.) from 35 per cent to 50 per cent, at a cost of GBP32 million.
This programme is in addition to the acquisitions completed earlier this year of
the Serramonte Shopping Centre, San Francisco, USA at a cost of $119 million and
King`s Reach, Southwark, London at a cost of GBP70 million.
(c) Potential investment and development programme
The potential long term investment and development programme includes major
regional shopping centre projects in Cardiff and Oxford, both based around
existing properties of the Group, which are at various stages of the planning
process. In addition the Group`s existing portfolio provides a number of
further opportunities, notably at Eldon Square, Newcastle.
(d) Expansion strategy of Liberty International
A substantial proportion of the Group`s overall investment and development
programme involves extensions to or increased interests in existing centres with
proven successful track records. The acquisition arrangements at Chapelfield
Norwich where Lend Lease Europe is the developer substantially insulate CSC from
construction and initial letting risk, in line with Liberty International`s low
risk expansion strategy at this time.
Collectively, the aforementioned projects represent a significant expansion and
enhancement of the Group`s activities and consolidation of its competitive
position in the UK regional shopping centre sector on which Liberty
International is predominantly focused.
Additional information on Liberty International and these projects and
opportunities is provided in Appendix 2 to this announcement.
Purpose of Placing
The Directors have concluded that additional equity finance, following the
recent announcement concerning the Victoria Centre, Nottingham, is an important
element in the Group`s overall financing plans in order to maintain the debt to
assets and interest cover ratios of Liberty International at appropriate levels,
where the cost of capital is optimised and the Group`s strong financial position
can be maintained.
The Placing is expected to be beneficial to Shareholders as it will enable
Liberty International to:
- continue the dynamic expansion and enhancement of its business.
- consolidate and augment its premier nationwide franchise in the UK shopping
centre business.
undertake long term infrastructure and regeneration projects, such as the highly
successful Braehead project, which require a significant backing of permanent
equity capital.
- continue to pursue attractive opportunities within its high performing
commercial and retail property business conducted by Capital & Counties,
including the Group`s interests in the USA which are predominantly retail,
including shopping centres.
- maintain its strong financial position. The Group has a highly defensive debt
structure in terms of its maturity, interest rate and risk profile with the
major proportion of the Group`s secured debt related to individual properties
and on a non-recourse basis to the Group.
- be in a position to continue to deliver capital appreciation and superior
returns to Shareholders.
Details of the Placing
Liberty International intends to raise a minimum of GBP89.6 million (before
expenses) through a placing of a minimum of 16 million new Ordinary Shares with
institutional and other investors. The Placing is being conducted through an
accelerated book-building process carried out by Morgan Stanley Securities
Limited ("Morgan Stanley") at a fixed price of 560p per new Ordinary Share ("the
Placing Price"). The Placing of 16 million new Ordinary Shares has been fully
underwritten by Morgan Stanley at the Placing Price (subject to the conditions
referred to in Appendix 1 under "Conditions of the Placing" and to the Placing
Agreement not being terminated as described in Appendix 1 under "Termination of
the Placing"). The Placing of 16 million new Ordinary Shares represents
approximately 5.6 per cent. of the existing issued share capital of the Company
prior to the Placing.
In connection with the Placing, The Gordon Family Trust, a trust within the
Gordon family interests and therefore a connected person of Mr Donald Gordon,
the Chairman of Liberty International, and as such a related party for the
purposes of the Listing Rules, has agreed to acquire and be allotted 8 million
Placing Shares at the Placing Price. The acquisition by The Gordon Family Trust
represents 2.8 per cent of Liberty International`s current issued share capital.
The existing family interests associated with Donald Gordon, Chairman of Liberty
International, prior to the Placing amounted to 53,810,378 Ordinary Shares (18.9
per cent. of Liberty International`s issued ordinary share capital) at the close
of business on 5 November 2002.
Morgan Stanley, with Liberty International`s agreement, reserves the right to
increase the size of the Placing at its discretion up to 28.4 million Ordinary
Shares (9.9 per cent of the existing issued share capital). Morgan Stanley, in
consultation with Liberty International, reserves the right to close the book at
any time. The book-building is expected to close not later than 4.30 pm (London
time) on 6 November 2002. However, Morgan Stanley may accept further bids after
initial allocations have been made on the basis explained in Appendix 1.
The Placing Shares will be issued credited as fully paid and will rank pari
passu with the existing Ordinary Shares, including the right to receive all
dividends and other distributions declared, made or paid on or in respect of
such shares after the date of issue. The Company will apply for admission of
the Placing Shares to the Official List and to listing on the London Stock
Exchange`s market for listed securities and it is expected that Admission of the
Placing Shares will take place and that trading will commence in the Placing
Shares on 13 November 2002. Application will also be made to the JSE Securities
Exchange South Africa for the Placing Shares to be admitted to the JSE
Securities Exchange South Africa.
The Placing, which will be conducted in accordance with the terms and conditions
set out in Appendix 1, is conditional, inter alia, on:
(a) the Placing Agreement becoming unconditional and not having been terminated
by Morgan Stanley in accordance with its terms prior to Admission; and
(b) Admission occurring by not later than 8.00 a.m. on Wednesday 13 November
2002, or such later time and/or date as the Company and Morgan Stanley agree.
Application of proceeds
The net proceeds of the Placing after deduction of the expenses of the Placing
will be applied to the payment associated with the assumption of the general
partner role of the Victoria Centre Partnership referred to above and to the
Group`s overall capital expenditure programme.
Current trading and prospects
Since 30 June 2002, the Company has:
- invested GBP32 million to increase its interest in The Potteries Shopping
Centre, Hanley, Stoke-on-Trent from 35 per cent to 50 per cent.
- disposed of its interest in The Ridings Shopping Centre, and adjoining
properties in Kirkgate, Wakefield, for GBP32 million, representing a small
premium to book value at 30 June 2002. The disposal reflects CSC`s policy of
concentrating on dominant regional shopping centres; The Ridings, Wakefield,
was CSC`s smallest shopping centre interest and no longer an appropriate asset
for the Group to hold given the size and scale of CSC`s overall portfolio.
- increased its effective ownership of The Victoria Centre, Nottingham, from 38
per cent to 100 per cent for a net investment of some GBP157 million.
Regional shopping centres comprise over 80 per cent of Liberty International`s
aggregate investment properties and retail in aggregate comprises around 90 per
cent.
The latest available retail sales figures for the year to date at CSC`s regional
centres have confirmed the pattern of overall year on year sales growth
reported at the half year with particularly strong growth from the more recently
opened centres, Braehead, Glasgow and The Chimes, Uxbridge. The Group`s
flagship centre, Lakeside, Thurrock, has continued its pattern of year on year
sales growth. Voids at CSC`s centres remain at an extremely low level with
continued retailer interest in obtaining new units within CSC`s portfolio.
Active management has resulted in tenancy changes of 82 retail units to the end
of September 2002 out of approximately 1425 retail units in total (following the
sale of The Ridings Shopping Centre in Wakefield), compared with 44 tenancy
changes at 30 June 2002. These changes include a number of retailers new to CSC
centres, as well as existing retailers securing additional space.
Capital & Counties` aggregate commercial and retail portfolio amounted to around
GBP900 million at 30 June 2002. Over half of the UK investments are within
Central London, principally within the West End and Mid Town areas. Of these,
prime retail properties represent one third and, to date, that market remains
buoyant together with the overall West End and Mid Town investment market. By
contrast, tenant demand for office space has weakened over the last 18 months.
However, the Company has confidence in the long term strength and resilience of
the West End and Mid Town areas with their increasingly restrictive planning
regime and wide range of business occupiers. Capital & Counties` Central London
office investments had an average passing rent of GBP26 per square foot at 30
June 2002 which is below the current level of market rents for equivalent space
and consequently continue to have reversionary potential.
Potential inclusion in FTSE-100 Index
Liberty International is listed on both the London Stock Exchange and since 1999
the JSE Securities Exchange South Africa. Liberty International`s FTSE ranking
on the London Stock Exchange on the basis of market capitalisation placed the
Company at number 96 at the close of business on 5 November 2002. The Placing
should improve Liberty International`s ranking with a possible outcome of entry
into the FTSE-100 index, which the Company considers should have a desirable
result of enhancing its profile with the London and international investment
communities, and should increase the liquidity of the Company`s Ordinary Shares.
General
Morgan Stanley is acting for Liberty International and no-one else in relation
to the Placing and will not be responsible to any person other than Liberty
International for providing the protections afforded to clients of Morgan
Stanley or for providing advice in relation to the Placing or in relation to the
contents of this announcement or any other transaction, arrangement or matter
referred to herein.
Certain statements made in this announcement are forward looking statements.
Such statements are based on current expectations and are subject to a number of
risks and uncertainties that could cause actual results and performance to
differ materially from any expected further results or performances, express or
implied, by the forward looking statements. Factors that might cause forward
looking statements to differ materially from actual results include, among other
things, political, regulatory and economic factors. Liberty International
assumes no responsibility to update any of the forward looking statements
contained in this announcement. Further, any indication in this announcement of
the price at which Ordinary Shares have been bought or sold in the past cannot
be relied upon as a guide to future performance.
This document does not constitute an offer to issue or sell, or the solicitation
of an offer to acquire or buy, any Placing Shares to any person in any
jurisdiction.
South African residents should be aware that South African Exchange Control
Regulations apply or may apply to a participation in the Placing. They should,
accordingly, through an authorised dealer, obtain any necessary approval or
establish that an existing exchange control approval or exemption applies to
such investment.
The Placing Shares have not been, nor will they be, registered under the
Securities Act or with any securities regulatory authority of any State or other
jurisdiction of the United States, and accordingly may not be offered or sold
within the United States except pursuant to an exemption from, or in a
transaction not subject to, registration under the Securities Act. No
regulatory authority has passed upon or endorsed the merits of the offering of
the Placing Shares or the accuracy or adequacy of this document. Any
representation to the contrary is a criminal offence in the United States.
APPENDIX 1
TERMS AND CONDITIONS
Important information on the Placing
MEMBERS OF THE GENERAL PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY AT
PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO
FALL WITHIN ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000
(FINANCIAL PROMOTION) ORDER 2001 (AS AMENDED) (THE "ORDER") OR ARE PERSONS
FALLING WITHIN ARTICLE 49(2)(a) TO (d) ("HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER OR TO WHOM IT MAY OTHERWISE
LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS
"RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN
MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND
CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL
BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
By participating in the Placing, Placees will be deemed to have read and
understood this Appendix 1 in its entirety and will acquire Placing Shares on
the terms and conditions contained herein.
This announcement and the information contained herein is not for publication or
distribution to persons in the United States, Canada, Australia, Japan or in any
jurisdiction in which such publication or distribution is unlawful. The Placing
Shares have not been, and will not be, registered under the Securities Act and
may not be offered or sold in the United States absent registration or an
exemption from registration. There will be no public offering of securities in
the United States.
This announcement does not constitute an offer for sale or acquisition for any
securities of the Company in the United States or any other jurisdiction.
South African residents should be aware that South African Exchange Control
Regulations apply or may apply to a participation in the Placing. They should,
accordingly, through an authorised dealer, obtain any necessary approval or
establish that an existing general exchange control approval or exemption
applies to such investment.
The distribution of this announcement and the Placing and/or issue of the
Placing Shares in certain jurisdictions may be restricted by law. No action has
been taken by the Company or Morgan Stanley, or any of their respective
affiliates, that would permit an offer of the Placing Shares or possession or
distribution of this announcement or any other offering or publicity material
relating to such Placing Shares in any jurisdiction where action for that
purpose is required. Persons into whose possession this announcement comes are
required by the Company and Morgan Stanley to inform themselves about and to
observe any such restrictions.
No prospectus
No prospectus or listing particulars have been or will be submitted to be
approved by the UK Listing Authority or filed with the Registrar of Companies in
England and Wales in relation to the Placing Shares.
Details of the Placing Agreement and the Placing Shares
Morgan Stanley (the "Manager") has entered into a placing agreement (the
"Placing Agreement") with the Company under which, on the terms and subject to
the conditions set out in the Placing Agreement, it has been appointed for the
purpose of seeking to arrange persons to agree to accept allotment of Placing
Shares ("Placees"), on the terms and subject to the conditions set out in this
Appendix.
No commissions will be payable to Placees in respect of any Placing Shares.
Application for admission to listing and trading
Application will be made to the UK Listing Authority for admission of the
Placing Shares to the Official List and to the London Stock Exchange for
admission to trading of the Placing Shares on the London Stock Exchange`s market
for listed securities. Application will also be made to the JSE Securities
Exchange South Africa for the Placing Shares to be admitted to the JSE
Securities Exchange South Africa.
Book-building
The Manager will today commence a book-building procedure (the "Book-building")
to arrange participation in the Placing by Placees and to establish the volume
of demand for Placing Shares at the Placing Price of 560p. This announcement
gives details of the terms and conditions of the Book-building and the Placing.
Principal terms of the Book-building and Placing
1. Participation in the Placing will only be available to persons who may
lawfully be, and are, invited to participate by the Manager.
2. Each bid should state the maximum number of Placing Shares or a monetary
value (at the Placing Price) of the Placing Shares which a prospective Placee
wishes to acquire. Bids may be scaled down by the Manager on the basis referred
to in paragraph 7 below.
3. The number of Placing Shares initially available under the Placing will be
16 million but this number may be increased, on the basis described below, at
the discretion of the Manager with the agreement of the Company.
4. The Book-building is expected to close no later than 4.30 pm on 6 November
2002. However, at the Manager`s discretion, firm allocations may be made
(subject to satisfaction of the conditions referred to below under "Conditions
of the Placing" and to this Placing not being terminated on the basis referred
to below under "Termination of the Placing" below), on the basis agreed between
the Company and the Manager, and communicated to Placees at any time during the
course of 6 November 2002 (an "initial allocation"). After any such initial
allocation, the Book-building will close unless the Manager decides to extend it
with the agreement of the Company. If the Book-building is extended, any initial
allocations will remain binding on both the Company and the Placees concerned
and it is expected that, subject to paragraph 7 below, the only bids which will
be taken into account after the time at which the initial allocation is made
will be bids submitted after that time.
5. If the Book-building is extended following an initial allocation on the
basis referred to in paragraph 4, the extended Book-building is expected to
close no later than 4.30 p.m. on Friday 8 November but it may be closed at an
earlier or later time at the discretion of the Manager.
6. Any initial allocations and any further allocations pursuant to any
extension of Book-building will be confirmed orally by the Manager as soon as
practicable following the time at which they are determined by the Manager. Oral
confirmation of an allocation by the Manager will give rise to a legally binding
commitment by the Placee concerned, in favour of both the Manager and the
Company, under which it agrees to acquire the number of Placing Shares allocated
to it on the terms and subject to the conditions set out in this Appendix 1 and
the Company`s Memorandum and Articles of Association.
7. Subject to paragraphs 4 and 6 above, the Manager may choose to accept bids,
either in whole or in part, on the basis of allocations determined at its
discretion (after consultation with the Company) and may scale down any bids for
this purpose on such basis as it may determine. It may also, notwithstanding
paragraphs 4 to 6 above, (a) allocate Placing Shares after the time of any
initial allocation to any person submitting a bid after that time and (b)
allocate Placing Shares after the Book-building has closed to any person
submitting a bid after that time. Placees should note that the Gordon Family
Trust, or its nominee, has agreed to acquire 8 million Placing Shares at the
Placing Price pursuant to the Placing and the Manager will allocate that number
of shares to it.
8. A bid in the Book-building will be made on the terms and subject to the
conditions in this Appendix and will be legally binding on the Placee on behalf
of which it is made and except with the Manager`s consent will not be capable of
variation or revocation after the time at which it submitted.
9. Each Placee`s obligations will be owed to both the Company and to the
Manager. As provided in the Placing Agreement, the allotment and issue of
Placing Shares by the Company will be in consideration for the fulfilment of
certain obligations by the Manager to the Company. Subject to the provisions of
"Registration and Settlement" below, each Placee will, however, also have an
immediate, separate binding obligation, owed to the Manager, to pay to it in
cleared funds an amount equal to the product of the Placing Price and the number
of Placing Shares it is to acquire pursuant to the Placing.
10. As soon as practicable following the time of any initial allocation, an
announcement will be made by the Manager on behalf of the Company giving details
of the initial allocation and, if relevant, of any extension of the Book-
building. A further announcement will be made on behalf of the Company giving
details of the size of the Placing as soon as practicable following the time at
which the Book-building closes. Except as required by law or regulation, no
press release or other announcement will be made by the Manager or the Company
using the name of any Placee (or its agent), in its capacity as Placee (or
agent), other than with such Placee`s prior written consent.
11. Irrespective of the time at which a Placee`s allocation(s) pursuant to the
Placing is/are confirmed, settlement for all Placing Shares to be acquired
pursuant to the Placing will be required to be made at the same time, on the
basis explained below under "Registration and Settlement".
12. All obligations under the Book-building and Placing will be subject to
fulfilment of the conditions referred to below under "Conditions of the Placing"
and to the Placing not being terminated on the basis referred to below under
"Termination of the Placing".
13. By participating in the Book-building each Placee will agree that its
rights and obligations in respect of the Placing will terminate only in the
circumstances described below and will not be capable of rescission or
termination by the Placee.
Registration and Settlement
If Placees are allocated any Placing Shares in the Placing they will be sent a
contract note or electronic confirmation which will confirm the number of
Placing Shares allocated to them, the Placing Price and the aggregate amount
owed by them to the Manager. Each Placee will be deemed to agree that it will do
all things necessary to ensure that delivery and payment is completed in
accordance with either the standing CREST or certificated settlement
instructions which they have in place with the Manager.
Settlement will be on a T+5 basis and is expected to occur on Wednesday 13
November 2002. Settlement will be on a delivery versus payment basis.
Interest is chargeable daily on payments not received on the due date in
accordance with the arrangements set out above, in respect of either CREST or
certificated deliveries, at the rate of 2 percentage points above prevailing
LIBOR.
If Placees do not comply with their obligations the Manager may sell their
Placing Shares on their behalf and retain from the proceeds, for its own account
and benefit, an amount equal to the Placing Price of each share sold plus any
interest due. Placees will, however, remain liable for any shortfall below the
Placing Price and for any stamp duty or stamp duty reserve tax (together with
any interest or penalties) which may arise upon the sale of their Placing Shares
on their behalf.
Settlement of transactions in the Placing Shares following Admission will take
place within the CREST system. However, in the event of any difficulties or
delays in the admission of the Placing Shares to CREST or the use of CREST in
relation to the Placing, the Company and the Manager may, however, agree that
the Placing Shares should be issued in certificated form. The Manager reserves
the right to require settlement for the Placing Shares, and to deliver the
Placing Shares to Placees, by such other means as it deems necessary if delivery
or settlement to Placees is not practicable within the CREST system or would not
be consistent with regulatory requirements in a Placee`s jurisdiction.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees must ensure that, upon receipt, the conditional contract note is copied
and delivered immediately to the relevant person within that organisation.
Conditions of the Placing
The obligations of the Manager in respect of the Placing are conditional on,
inter alia:
(a) Admission occurring by not later than 8.00 a.m. on Wednesday 13 November
2002 (or such later time and/or date as the Company and the Manager may agree);
(b) none of the warranties given by the Company in the Placing Agreement being
untrue, inaccurate, incorrect or misleading in any respect on certain dates
prior to Admission and on the date of Admission;
(c) the Company having, in the opinion of the Manager, complied with its
obligations under the Placing Agreement save to the extent that any non-
compliance is not, in the opinion of the Manager, material in the context of the
Placing; and
(d) certain other conditions set out in the Placing Agreement
The Manager may, at its discretion and upon such terms as it thinks fit, waive
compliance by the Company with the whole or any part of any of the Company`s
obligations in relation to the conditions in the Placing Agreement, save that
certain conditions including the condition relating to Admission referred to in
paragraph (a) above may not be waived.
Termination of the Placing
The Manager may, at its absolute discretion, by notice in writing to the
Company, terminate the Placing Agreement at any time prior to Admission if,
inter alia:
(a) it becomes aware that the Company is in breach of any of its obligations
under the Placing Agreement save to the extent that any breach is not, in the
opinion of the Manager, material in the context of the Placing; or
(b) it becomes aware that any of the warranties given by the Company in the
Placing Agreement is, or if repeated at any time up to and including Admission
(by reference to the facts and circumstances then existing) would be, untrue,
inaccurate, incorrect or misleading; or
(c) it is of the opinion that an event has occurred which:
(i) constitutes a change or new matter which renders this announcement and/or
any presentation made in relation to the Placing by or on behalf of the Company
or its employees or directors or any amendment or supplement to either of them
inaccurate or misleading; or
(ii) constitutes an adverse change, or a prospective adverse change, in or
affecting the prospects, general affairs, management, financial or trading
position, shareholders` funds or results of operations of the Company or its
subsidiaries which will be prejudicial to dealings in the Ordinary Shares or
which makes it inadvisable or impractical to proceed with the Placing or the
delivery of the Placing Shares on the terms and in the manner contemplated in
this Appendix 1 and the Placing Agreement; or
(d) there has occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the London Stock Exchange; (ii)
a suspension or material limitation in trading in the Company`s securities on
the London Stock Exchange; (iii) a general moratorium on commercial banking
activities in London declared by the relevant authorities, or a material
disruption in commercial banking or securities settlement or clearance services
in the United Kingdom; (iv) any outbreak of hostilities or escalation thereof or
an act of terrorism involving the United Kingdom or the United States or the
declaration by the United Kingdom or the United States of a national emergency
or war; or (v) the occurrence of any other calamity or crisis or any change or
development in financial, political or economic conditions or currency exchange
rates or controls or taxation, if the effect of any such event in (i) to (v) in
the judgment of the Manager makes it impracticable or inadvisable to proceed
with the Placing or will be to prejudice dealings in the Ordinary Shares.
Representations and further terms
By submitting a bid in the Book-building, each Placee represents, warrants,
acknowledges and agrees that:
1. it has read this announcement (including this Appendix);
2. (i) it has not relied on any information given or representations or
statements made by the Company or the Manager or any other person acting on its
or their behalf in connection with the Placing other than information contained
in this announcement and any information previously published by the Company by
notification to a Regulatory Information Service ("Publicly Available
Information") and (ii) it has made its own investigation of the business,
financial and other position of the Company, satisfied itself that the
information is still current and relied on that investigation for the purposes
of its decision to participate in the Placing;
3. neither the Manager nor any person acting on its behalf is responsible for
or has or shall have any liability for any information or representation
relating to the Company contained in this announcement or the Publicly Available
Information nor will be liable for any Placee`s decision to participate in the
Placing based on any information, representation, warranty or statement
contained in this announcement, the Publicly Available Information or otherwise.
Nothing in this Appendix shall exclude any liability of any person for
fraudulent misrepresentation;
4. participation in the Placing is on the basis that it is not and will not be
a client of the Manager and that the Manager has no duties or responsibilities
to a Placee for providing protections afforded to its clients or for providing
advice in relation to the Placing nor in respect of any representations,
warranties, undertakings or indemnities contained in the Placing Agreement;
5. unless the Company and the Manager otherwise agree, it is not, and at the
time the Placing Shares are acquired will not be a resident of Australia, Canada
or Japan and it and the beneficial owner of the Placing Shares at the time they
are acquired are, and will at that time be, (i) not in the United States or (ii)
acquiring in an "offshore transaction" within the meaning of Regulation S under
the Securities Act or (iii) a qualified institutional buyer (as defined in Rule
144A under the Securities Act) (a "QIB") acquiring the Placing Shares in the
United States for investment purposes only, and not with a view to distribution
of the Placing Shares within the meaning of United States securities laws;
6. the Placing Shares have not been registered or otherwise qualified for
offer and sale nor will a prospectus be cleared in respect of any of the Placing
Shares under the securities laws of the United States, Australia, Canada or
Japan and, subject to certain exceptions, may not be offered, sold, taken up,
renounced or delivered or transferred, directly or indirectly, within the United
States, Australia, Canada or Japan;
7. it and/or each person on whose behalf it is participating:
(i) is entitled to acquire Placing Shares pursuant to the Placing under the
laws of all relevant jurisdictions;
(ii) has fully observed such laws;
(iii) has capacity and authority and is entitled to enter into and perform
its obligations as an acquirer of Placing Shares and will honour such
obligations; and
(iv) has obtained all necessary consents and authorities (including, without
limitation, in the case of a person acting on behalf of a Placee, all necessary
consents and authorities to agree to the terms set out or referred to in this
Appendix) under those laws or otherwise;
8. the Placing Shares have not and will not be registered under the Securities
Act, or under the securities laws of any state of the United States, and are
being offered and sold on behalf of the Company in offshore transactions (as
defined in Regulation S under the Securities Act) and to QIBs in reliance upon
rule 144A or another exemption from the registration requirements under the
Securities Act";
9. so long as the Placing Shares are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, it will not deposit the
Placing Shares into any depositary receipt facility maintained by any depositary
bank in respect of the Company`s Ordinary Shares;
10. it will not reoffer, sell, pledge or otherwise transfer the Placing Shares
except (i) in an offshore transaction in accordance with Regulation S under the
Securities Act; (ii) in the United States to QIBs pursuant to Rule 144A under
the Securities Act; or (iii) pursuant to Rule 144 under the Securities Act (if
available), and that, in each such case, such offer, sale, pledge, or transfer
will be made in accordance with any applicable securities laws of any state of
the United States;
11. if it is acquiring Placing Shares for the account of one or more QIBs, it
has full investment discretion with respect to each such account and it has
full power to make the foregoing acknowledgements, representations and
agreements on behalf of each such account; and if it is a QIB acquiring such
Placing Shares for its own account or it is acquiring such Placing Shares for
the account of a QIB, it is aware that the sale of the Placing Shares is being
made in reliance upon Rule 144A or another exemption from the registration
requirements of the Securities Act;
12. if it will be a "US Holder" as defined below under the heading "Passive
Foreign Investment Company", it acknowledges that it has read and understood the
disclosure thereunder;
13. it will make payment to the Manager in accordance with the terms and
conditions of this announcement on the due times and dates set out in this
announcement, failing which the relevant Placing Shares may be placed with
others on such terms as the Manager determines;
14. the person who it specifies for registration as holder of the Placing
Shares will be (i) the Placee or (ii) a nominee of the Placee, as the case may
be. The Manager and the Company will not be responsible for any liability to
stamp duty or stamp duty reserve tax resulting from a failure to observe this
requirement. It agrees to acquire Placing Shares pursuant to the Placing on the
basis that the Placing Shares will be allotted to a CREST stock account of the
Manager who will hold them as nominee on behalf of the Placee until settlement
in accordance with its standing settlement instructions with it;
15. the issue to it of Placing Shares will not give rise to a liability under
any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts
and clearance services);
16. unless the Company and the Manager otherwise agree, it falls within Article
19 and/or 49 of the Financial Services and Markets Act 2000 (Financial
Promotions) Order 2001, as amended;
17. it has not offered or sold and undertakes that it will not offer or sell
any Placing Shares in the United Kingdom except to persons who fall within
paragraph 3(a) of Schedule 11 to the Financial Services and Markets Act 2000
(the "FSMA") (a person whose ordinary activities involve it in acquiring,
managing or disposing of investments (as principal or agent) for the purpose of
its business) or otherwise and in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offer of Securities Regulations 1995;
18. it has only communicated or caused to be communicated and it will only
communicate or cause to be communicated any invitation or inducement to engage
in investment activity (within the meaning of section 21 of the FSMA) relating
to Placing Shares in circumstances in which section 21(1) of the FSMA does not
require approval of the communication by an authorised person;
19. it has complied and it will comply with all applicable provisions of the
FSMA with respect to anything done by it or on its behalf in relation to the
Placing Shares in, from or otherwise involving the United Kingdom;
20. it and any person acting on its behalf (i) are aware of their obligations
in connection with money laundering under the Criminal Justice Act 1993; (ii)
have verified the identity of their clients in accordance with the Money
Laundering Regulations (1993) (the "Regulations"); and (iii) they have complied
fully with their obligations under the Regulations;
21. the Company, the Manager and others will rely upon the truth and accuracy
of the foregoing representations, warranties, acknowledgements and agreements;
22. the Placing Shares will be issued subject to the terms and conditions of
this Appendix; and
23. this Appendix and all documents into which this Appendix is incorporated by
reference or otherwise validly forms a part will be governed by and construed in
accordance with English law. All agreements to acquire shares pursuant to the
Book-building and/or the Placing will be governed by English law and the English
courts shall have exclusive jurisdiction in relation thereto except that
proceedings may be taken by the Manager in any jurisdiction in which the
relevant Placee is incorporated or in which any of its securities have a
quotation on a recognised stock exchange.
Please also note that the agreement to allot and issue Placing Shares to Placees
(or the persons for whom Placees are contracting as agent) free of stamp duty
and stamp duty reserve tax in the UK relates only to their allotment and issue
to Placees, or such persons as they nominate as their agents , direct from the
Company for the Placing Shares in question. Such agreement assumes that the
Placing Shares are not being acquired in connection with arrangements to issue
depositary receipts or to transfer the Placing Shares into a clearance service.
If there were any such arrangements, or the settlement related to other dealing
in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for
which neither the Company nor the Manager would be responsible. If this is the
case, it would be sensible for Placees to take their own advice and they should
notify the Manager accordingly. In addition, Placees should note that they will
be liable for any capital duty, stamp duty and all other stamp, issue,
securities, transfer, registration, documentary or other duties or taxes
(including any interest, fines or penalties relating thereto) payable outside
the UK by them or any other person on the acquisition by them of any Placing
Shares or the agreement by them to acquire any Placing Shares.
The representations, warranties, acknowledgements and undertakings contained in
this Appendix are given to the Manager for itself and on behalf of the Company
and are irrevocable.
The Manager is acting exclusively for the Company and no one else in connection
with the Book-building and the Placing and will not be responsible to anyone
(including Placees) other than the Company for providing the protections
afforded to its customers or for providing advice in relation to the Book-
building or the Placing or any other matters referred to in this press
announcement.
Each Placee and any person acting on behalf of the Placee acknowledges that the
Manager does not owe fiduciary or other duties to any Placee in respect of any
representations, warranties, undertakings or indemnities in the Placing
Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and
agrees that the Manager may (at its absolute discretion) satisfy its obligations
to procure Placees by itself agreeing to become a Placee in respect of some or
all of the Placing Shares or by nominating any connected or associated person to
do so.
When a Placee or any person acting on behalf of the Placee is dealing with the
Manager, any money held in an account with the Manager on behalf of the Placee
and/or any person acting on behalf of the Placee will not be treated as client
money within the meaning of the relevant rules and regulations of the Financial
Services Authority which therefore will not require the Manager to segregate
such money, as that money will be held by it under a banking relationship and
not as trustee.
All times and dates in this Appendix may be subject to amendment. The Manager
will notify persons acting on behalf of the Placees of any changes.
Passive Foreign Investment Company
The following discussion applies only to US Holders of the Company`s Ordinary
Shares. For this purpose, a US Holder is a beneficial owner of Ordinary Shares
that is (i) a citizen or resident of the United States for US federal income tax
purposes; (ii) a corporation, or other entity treated as a corporation, created
or organised under the laws of the United States or any state thereof; (iii) an
estate the income of which is subject to US federal income tax without regard to
its source; or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more US persons have the authority to control all substantial decisions of the
trust.
There is a risk that the Company may be considered to be a Passive Foreign
Investment Company (a "PFIC") for US federal income tax purposes because it
holds rental properties in subsidiaries that are separate from the subsidiaries
through which it conducts its property management activities. If the Company is
a PFIC in any year during which a US Holder owns Ordinary Shares, and the US
Holder has not made a mark to market or qualified electing fund ("QEF")
election, the US Holder will generally be subject to special rules (regardless
of whether the Company continues to be a PFIC) with respect to (i) distributions
exceeding 125 per cent of the average annual distributions received from the
Company in the previous three taxable years or, if shorter, the US Holder`s
holding period for the Ordinary Shares; and (ii) any gain realised on the sale
or other disposition of Ordinary Shares.
Under these rules (i) the distribution or gain will be allocated rateably over
the US Holder`s holding period; (ii) the amount allocated to the current taxable
year and any taxable year prior to the first taxable year in which the Company
was a PFIC will be taxed as ordinary income; and (iii) the amount allocated to
each of the other taxable years will be subject to tax at the highest rate of
tax applicable to the US Holder for that year and an interest charge for the
deemed deferral benefit will be imposed on the resulting tax attributable to
each of those other taxable years. If the Company is a PFIC, a US Holder will
generally be subject to similar rules with respect to distributions to the
Company by, and dispositions by the Company of the shares of, any of the
Company`s direct or indirect subsidiaries that are also PFICs.
US Holders can avoid the interest charge by making a mark to market election
with respect to the Ordinary Shares, provided that the shares are "marketable".
Shares will be marketable if they are regularly traded on certain US stock
exchanges, or on a foreign stock exchange that satisfies certain regulatory
requirements. It is expected that the London Stock Exchange will satisfy these
requirements. For purposes of this election, the Ordinary Shares will be
considered regularly traded during any calendar year during which they are
traded, other than in de minimis quantities, on at least 15 days during each
calendar quarter. Any trades that have as their principal purpose meeting this
requirement will be disregarded. US Holders should consult their tax advisers
concerning the availability and consequences of making a mark to market election
with respect to the Ordinary Shares.
In some cases a shareholder can avoid the interest charge and the other adverse
PFIC consequences described above by making a QEF election to be taxed currently
on its share of the PFIC`s undistributed income. The Company does not, however,
expect to provide US Holders with the information regarding this income that
would be necessary for a US Holder to make a QEF election with respect to its
Ordinary Shares.
If the Company is a PFIC, each US Holder will be required to make an annual
return on IRS Form 8621, reporting distributions received and gains realised
with respect to each PFIC in which it holds a direct or indirect interest. US
Holders should consult their tax advisers regarding the potential application of
the PFIC regime.
APPENDIX 2
Information on Liberty International
Liberty International is a major UK listed property group owning 100 per cent of
both CSC, the leading regional shopping centre business, and Capital & Counties,
a commercial and retail property investment and development company. Liberty
International has been listed on the London Stock Exchange since July 1992 and
listed since 1999 on the JSE Securities Exchange South Africa.
Liberty International has approximately 284.2 million ordinary shares in issue
(297.9 million on a fully diluted basis) with a fully diluted net asset value
per share at 30 June 2002 of 836p.
Liberty International`s investment properties at 30 June 2002 amounted to GBP4.2
billion and net borrowings were GBP1.7 billion, with shareholders` funds of
GBP2.4 billion.
The Group`s GBP3.4 billion regional shopping centre portfolio operated by CSC
(now including a 100 per cent interest in The Victoria Centre, Nottingham) is
the premier shopping centre franchise in the UK with:
- landmark assets, such as the 3 out-of-town centres at Lakeside, Thurrock, the
MetroCentre, Gateshead, and Braehead, Glasgow
- 6 major in-town centres
- 6 of the UK`s top 15 shopping centres
- around 180 million customer visits per annum
- catchment areas covering over one-third of the UK`s population
- strong relationships with major retailers
- extensive experience of working with partners and local authorities
- active management approach treating shopping centres as businesses
The GBP900 million commercial and retail property portfolio operated by Capital
& Counties includes significant holdings in London`s West End, particularly in
Piccadilly, Covent Garden, the Strand, Regent Street and Kensington High Street,
together with retail interests in major UK cities and a property business in
California with approximately $300 million of primarily retail assets, including
shopping centres.
Details of Individual Projects
A. Committed Acquisitions and Developments
MetroCentre, Gateshead (1.6 million sq.ft, 90 per cent owned)
Work has now started on the main contract for the redevelopment of parts of
MetroCentre. The New Red Mall scheme, replacing a redundant supermarket, will
provide 371,000 sq.ft. of retail space, including a new Debenhams department
store and 28 new shop units which will open for trade in autumn 2004. A new
1,100 space covered car park will link directly to the department store and into
the new mall.
The New Public Transport Exchange, which replaces the existing bus station will
provide state-of-the-art facilities with internal, mall-quality waiting areas
for shoppers. It will also be a terminus for the dedicated Centrelink bus
service direct to central Gateshead. As part of this scheme, the railway
interchange will
